Right out of Atlas Shrugged: Government pays millions for empty flights to rural airports

This is what happens when government says that it has a mission to maintain the economic viability of enterprises or communities that are not viable on their own. There is a $200 million federal program called Essential Air Service. Among its clients is Great Lakes Airline, which runs daily flights between Ely, Nevada, and Las Vegas. On some days, there are no passengers on the flights. But the federal government pays the airline anyway.

As the AP reports:

Federal statistics reviewed by The Associated Press show that in 2010, just 227 passengers flew out of Ely while the airline got $1.8 million in subsidies. The travelers paid $70 to $90 for a one-way ticket. The cost to taxpayers for each ticket: $4,107.

Ely is one of 153 rural communities where airlines get subsidies through the $200 million Essential Air Service program, and one of 13 that critics say should be eliminated from it.

Some call the spending a boondoggle, but others see it as a critical financial lifeline to ensure economic stability in rural areas.

Steve Smith, executive director of the Jackson, Tenn., airport authority, also has seen empty or near empty flights take off, since the airlines get paid per flight, not per passenger.

The subsidy amounted to $244 for each of the 2,514 people who flew out of Smith’s airport last year, though few if any passengers knew that.

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LA writes:

Note to newer readers: my approving mention of Atlas Shrugged does not imply approval of that novel as a whole or of Ayn Rand’s philosophy, which I completely oppose. But the novel, notwithstanding its fatal flaws, includes criticisms of collectivist egalitarianism which are enduringly valid.

Robert B. writes:

If you go to Great Lakes Airline’s website and click on “about us” you can read its history. First you see that it was a Iowa based company—North Western Iowa, to be exact. There are no Great Lakes anywhere near there. But then one reads further and discovers that its phenomenal growth began when the government initiated its Essential Air Service program. The company went from being a tiny, very niche, company flying Beechcraft prop planes to becoming a regional airline. Thus the company was almost entirely built on the backs of taxpayers at an enormously high rate of subsidy.

What a hole in the pockets of the private sector—a service that no one really wants gets subsidized by the taxpayers and the beneficiaries get rich off the taxpayers. One wonders just how many of these “King’s Grants” exist and just how much damage is done to the private sector as a result—what might exist if not for these subsidies?

Posted by Lawrence Auster at August 12, 2011 07:53 AM | Send